Question

From the following Receipts and Payments Account and additional information given below , prepare Income and Expenditure Account and Balance Sheet of Rural Literacy Society as on 31st March, 2018:

RECEIPTS AND PAYMENTS ACCOUNT for the year ended 31 st March, 2018
Dr.					Cr.
Receipts		Amount (₹)	Payments		Amount (₹)
To Balance b/d			By General Expenses		32,000
Cash in Hand		40,000	By Newspaper		18,500
Cash at Bank		1,55,500	By Electricity		30,000
To Subscriptions:			By Fixed Deposit with Bank		1,80,000
2016-17	12,000		(On 30th September, 2017 @ 10%p.a.)
2017-18	2,65,000		By Books		70,000
2018-19	5,000	2,82,000	By Salary		36,000
To Sale of Old Newspaper		12,500	By Rent		65,000
To Government Grant		1,20,000	By Postage Charges		3,000
To Sale of Old Furniture		37,000	By Furniture (purchased)		1,05,000
(Book value ₹50,000)			By Balance c/d:
To Interest received on Fixed Deposit		4,500	Cash in Hand		30,000
			Cash at Bank		82,000
		6,51,500			6,51,500

Additional information:
(i) Subscription outstanding as on 31st March, 2017 ₹ 20,000 and on 31st March, 2018 ₹ 15,000.
(ii) On 31st March , 2018, salary outstanding ₹ 6,000 and one month rent paid in advance.
(iii) On 1st April, 2017, society owned furniture ₹ 1,20,000 and books ₹ 50,000.

Answer 1

Income and Expenditure Account for the year ending March 31, 2018
Dr.					Cr.
Expenditure		Amount (₹)	Income		Amount (₹)
General Expenses		32,000	Subscriptions	2,65,000
Newspaper		18,500	Add: Current O/s	7,000	2,72,000
Electricity		30,000	Sale of Old News Paper		12,500
Salary	36,000		Government Grant		1,20,000
Add: Outstanding	6,000	42,000	Interest on Fixed Deposit		9,000
Rent	65,000		(18,000 @ 10% for 6 months)
Less: Prepaid	5,000	60,000
Postage Charges		3,000
Loss on Sale of Furniture		13,000
Surplus		2,15,000
		4,13,500			4,13,500

Balance Sheet as on March 31, 2018
Liabilities		Amount (₹)	Assets		Amount (₹)
Capital Fund			Books	50,000
Opening Balance	3,85,500		Add: Purchases	70,000	1,20,000
Add: Surplus	2,15,000	6,00,500	Prepaid Rent		5,000
Salary Outstanding		6,000	Furniture	1,20,000
Subscription Received in Advance		5,000	Add: Purchases	1,05,000
			Less: Sale	50,000	1,75,000
			Fixed Deposit	1,80,000
			Add: Accrued Interest	4,500	1,84,500
			Subscriptions Outstanding		15,000
			Cash		30,000
			Bank		82,000
		6,11,500			6,11,500

Working Notes

WN1: Ascertainment of Capital Fund

Balance Sheet as on March 31, 2017
Liabilities	Amount (₹)	Assets	Amount (₹)
Capital Fund	3,85,500	Subscriptions Outstanding	20,000
		Books	50,000
		Furniture	1,20,000
		Cash	40,000
		Bank	1,55,500
	3,85,500		3,85,500